Changpeng Zhao, the billionaire founder of Binance, is weighing the possibility of opening his $10 billion investment arm, YZi Labs, to external investors in the future. The firm, which was spun out of Binance in January, is still in its early stages of development but has already attracted significant interest from outside backers, according to a report from the Financial Times.
A Growing Vehicle with Deep Roots in Binance
YZi Labs was set up to manage Zhao’s personal wealth alongside funds from a close group of early Binance executives, including co-founder Yi He. The firm invests primarily in crypto start-ups but has been steadily diversifying into areas such as artificial intelligence, robotics and biotech.
In 2022, it briefly accepted around $300 million from external investors before returning part of that capital. Now, chief executive Ella Zhang has confirmed that discussions around reopening the doors remain active. However, she emphasised that the firm is focused on strengthening internal capabilities first.
“Bringing in external capital is a huge responsibility,” Zhang said. “Our near-term priority is to expand the team and deepen our expertise, particularly in AI and biotech.”
The firm currently has a 12-person team and positions itself with a “super long-term” view, signalling that it is not chasing short-term multiples or annual performance targets. Instead, it is aiming to take advantage of its large capital base to make durable bets across emerging industries.
US Investors Could Alter the Landscape
One of the critical questions for YZi Labs is whether it will allow participation from US investors. Should that happen, the firm would be subject to much stricter regulatory oversight. The issue is particularly sensitive given Zhao’s history with US regulators.
Zhao, better known as CZ, co-founded Binance in 2017 and built it into the world’s largest cryptocurrency exchange. His personal stake in the company has secured him a place among the wealthiest figures in crypto. Yet his career has also faced turbulence. In 2023, he pleaded guilty to violating US anti-money laundering laws and served a four-month jail sentence. Binance itself also admitted to sanctions and money laundering violations, paying over $4.3 billion in penalties.
Since stepping down as CEO, Zhao has remained in the spotlight. He has sought a presidential pardon in the United States and continued to back new ventures through YZi Labs. Any decision to admit US investors would reintroduce direct exposure to American regulators, even as Washington signals a more supportive approach toward digital assets.
Signs of Regulatory Engagement
Despite Zhao’s legal history, Ella Zhang pointed out that the climate in the United States is shifting. She noted that the Securities and Exchange Commission (SEC) recently requested a private showcase of YZi-backed projects after its chair was unable to attend a demo day at the New York Stock Exchange.
Zhang also highlighted a broader trend of crypto entrepreneurs returning to Silicon Valley after years of distancing themselves from the US market. “The administration wants to promote the country as a crypto hub,” she said, adding that some regulators appear “open minded” about innovation.
This growing engagement may provide an opening for YZi Labs to align itself more closely with US capital, though it remains a delicate balancing act for Zhao given his past run-ins with the law.
Deploying $10 Billion Across Crypto, AI and Robotics
The size of YZi Labs’ portfolio presents both opportunity and challenge. Roughly 70% of its assets remain tied to crypto, but the firm is also making strong pushes into AI, robotics and biotech. Deploying capital at scale without diluting quality has been a key hurdle.
Zhao has leaned into creative treasury structures to put money to work. For instance, YZi is backing deals where public companies raise funds specifically to purchase tokens. One notable transaction includes a planned $1 billion deal with former Bitmain executives. Earlier this year, YZi also led a raise to convert a Nasdaq-listed vape manufacturer into a treasury vehicle tied to Binance’s BNB token.
These innovative structures highlight how YZi Labs is leveraging public markets to deepen its crypto exposure while also carving out space in adjacent technology sectors.
Long-Term Horizons Amid Shifting Industry Dynamics
The roadmap for YZi Labs reflects both Zhao’s entrepreneurial legacy and his desire to diversify beyond crypto. The firm’s cautious approach to external funding underscores its ambition to build a disciplined, long-term investment platform rather than chasing quick returns.
For now, external investors must wait. But steady outside interest suggests YZi could eventually evolve into a major external fund, potentially shaping the next wave of crypto and technology investments. Whether that includes US backers will depend not only on Zhao’s strategy but also on how regulators adapt to a changing financial landscape.
